Robert Half Hits 52-Week High

Shares of Robert Half International Inc (RHI) hit a new 52-week high of $37.59 on Mar 28 and eventually closed at $37.53, generating a return of approximately 15.8% year-to-date. Robert Half’s shares have been riding high since it reported solid fourth quarter results on Jan 29.

This staffing company beat its previous 52-week high of $37.15 attained on Feb 19. The company’s long-term estimated EPS growth rate is 17.75%. Average volume of shares traded over the last three months came in at approximately 932K.

Factors Driving Momentum

Strong revenue growth, solid financial position with reasonable debt, impressive earnings record boosted by continued demand for specialized staffing and consulting services, particularly in the U.S. continue to be Robert Half’s strength.

Robert Half has witnessed strong revenue growth in each of its business segments, which drove the company’s strong fourth quarter 2012 results. Earnings of 42 cents increased 40% from the year-earlier quarter and also beat the Zacks Consensus Estimate by 2.4%. Moreover, the company’s earnings have now grown more than 20% year over year for 11 straight quarters.

Gross margin expanded 50 basis points to 40.3% in the quarter while operating margin increased 200 basis points to 9.4% on the back of higher gross margins, lower operating expenses and solid results of the company’s wholly-owned subsidiary, Protiviti.

Robert Half is scheduled to report its first quarter 2013 earnings this month. We believe that the strong demand for specialized staffing and consulting services, particularly in the U.S. will continue to drive profits for Robert Half in the upcoming quarter. Further, the improving global economic condition will boost the demand for the company's temporary and permanent staffing services and risk consulting and internal audit services.

Protiviti will continue to remain one of the key drivers of revenue and operating growth and help companies solve problems in finance, technology, operations, governance, risk and internal audit. Protiviti’s purchase of privately-held SusQtech Inc. in late December is also expected to meet the growing demand for skilled workforce as well as provide its key clients with software consulting services.

Other Stocks to Consider

Robert Half currently carries a Zacks Rank #3 (Hold). Stocks that are performing well and are worth considering in the business services sector include Manpower, Inc. (MAN), Startek Inc (SRT) and AMN Healthcare Services (AHS). While Manpower and Startek carry a Zacks Rank #1 (Strong Buy), AMN Healthcare holds a Zacks Rank #2 (Buy).